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How We Did It: Public Private Partnership

University turns to alternative market rate financing to fund laboratory space project
University Business, Apr 2009

In 2000, the University of Washington School of Medicine sought a project model to build new laboratory space beyond the traditional UW campus. Their goals were to construct a high quality lab building that provided space in alignment with the national reputation of the institution—and to provide that space quickly. To accomplish those goals, the school sought alternative, market rate financing outside of the lengthy six-year State of Washington capital development process and a sophisticated team to deliver it.

A Public-Private-Partnership (PPP) was identified as the ideal model for developing and financing off-campus facilities for UW. In 2001 they selected Vulcan Inc. as developer for a major property in Seattle’s South Lake Union neighborhood. The stage was set for the project team to establish goals for a new School of Medicine and work together to achieve a complex of buildings that created a community of research focused on genetics.

Concurrently the School of Medicine appointed the National Development Council (NDC) as the non-profit organization to own and finance the project. Tax-exempt lease revenue bonds were issued through NDC, backed by a date certain lease to the UW and supported by income from research grants and other sources. The design team included Vulcan, Perkins+Will and consultants, and the construction managers were Turner Construction (Phase I) and Sellen Construction (Phase II). The Seneca Group acted as the owner representative for NDC.

The PPP process is first a partnership among the institutional user, a non-profit corporation and the developer. It is also a flexible process, where faster and more economical systems are common in the private sector, such as fast track scheduling and multiple procurement methods (bidding, design/build and negotiated) can be applied.

The National Development Council, the 501(c) 3 non-profit corporation, is at the heart of the public-private agreement, contracting with the institutional user and the developer. In the UW South Lake Union project, the NDC sold bonds issued by a third party conduit issuer under 501(c) 3 guidelines. The values received from the PPP system include the best of both the university and private world -- the benefit of low cost financing that the university typically receives, and the time-savings that private developments typically receives.

The South Lake Union complex was developed in two major phases, each involving a similar PPP approach with Vulcan as developer and NDC as the non-profit partner. Phase I was the conversion and renovation of an existing office building on the site, the 105,000-square-foot Washington Natural Gas building, to a fully converted modern bio-medical research facility. The project was completed in a remarkable 16 months, including design and construction.

The new UW Medicine Phase II creates a new collaborative complex, with 400,000-square-foot of above grade laboratory Research and Administrative facilities focused on a new inner courtyard. There is another 200,000-square-foot of below grade lab support space, loading and parking. The entire complex was completed in three and half years, from the start of programming compared with a norm of six years on the main campus for conventional projects.

The savings in time translated to significant cost savings, including lower overhead costs and a lower cost escalation factor. The project team arrangement of Vulcan, School of Medicine, NDC, Sellen Construction (Phase II) and Perkins+Will fostered a true collaborative approach to meet the planning and design goals of the project within the construction budget of $115 million.

UW Medicine Phase II is not only a landmark for the PPP delivery process but an icon of modern design and urbanism. Creating a new aesthetic in South Lake Union in glass and metal, the forms reveal the functionality of the buildings and express a contemporary architecture. The buildings highlight integration with the community and neighborhood with their inviting and open courtyard and landscaped interior paths that link four entries. The western edge of the project enhances the tree-lined Eighth Avenue that provides a pedestrian friendly path to the Denny Park, Seattle’s oldest park.

The School of Medicine campus invites the public to share in the celebration of science and research around a center that features a café, conference center and reception space. All stairs and building lobbies link to the center and look into it from above. On the south side, occupants and visitors are invited through a visually compelling courtyard, with its ipe wood boardwalk leading to the reception center. There, cable suspended lights above give a feeling of a gathering place on a human scale. The rhythm of glass and aluminum curtain wall adds to this visually exciting experience day and night.

Ultimately the realization of this successful project occurred via the PPP delivery process — through collaboration. The university, the design team and the contractor fostered collaboration at all stages of the process. It was a team process that achieved a functional, yet beautiful place for the University of Washington.

Anthony Gianopoulos, AIA, LEED AP, is an associate principal with Perkins+Will in their Seattle office. He was the managing principal for the University of Washington School of Medicine Phase II project and the design team liaison for the Public/Private Partnership between the University of Washington, Vulcan Inc., and NDC. Jill Morelli, FAIA, is director of facilities for the University of Washington School of Medicine. She oversees space management, project construction and asset management of the facilities located off the main campus. She has worked in traditional architectural practice, and with private developers, Dade Co. (Fla.) Public Schools and Ohio State University.

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